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Peers for Lululemon Athletica inc. (NASDAQ:LULU) include NIKE, Inc. (NYSE:NKE), Under Armour Inc (NYSE:UA), Gildan Activewear Inc (USA) (NYSE:GIL), and Columbia Sportswear Company (NASDAQ:COLM). Most of these comparable companies (the exception being Under Armour Inc (NYSE:UA)) post trailing earnings multiples in the 20-23 range, which while still aggressive valuations are significant discounts to Lululemon Athletica inc. (NASDAQ:LULU). Of course, the principal driver of this gap is lululemon’s higher growth rates: in its most recent quarter, Nike’s revenue grew only 9% compared to the same period in the previous fiscal year while Columbia Sportswear Company (NASDAQ:COLM) actually experienced a decline in sales (we’d note that Columbia is another popular short target). NIKE, Inc. (NYSE:NKE), however, has been reporting higher net income numbers and could be worth a look. Gildan Activewear Inc (USA) (NYSE:GIL)’s revenue numbers have been quite strong, and analyst expectations imply a forward P/E of only 13. If it hits those targets, then the stock might qualify for “growth at a reasonable price.” That leaves Under Armour, which is quite similar to lululemon in terms of its financials and valuation: the trailing and forward P/Es are 47 and 31, respectively. Revenue numbers in its last quarterly report compared to the fourth quarter of 2011 were about even with what lululemon experienced, and earnings growth was close to 50% as well. 19% of Under Armour’s float is held short.

Under Armour and lululemon seem too dependent on future earnings growth for us to recommend buying- at their present valuation current growth rates would have to continue for several years. Gildan appears to be the most likely value prospect, though even there the company may be a bit speculative as the trailing earnings multiple is not particularly low and any value case is rooted in the business meeting analyst expectations over the next two years.